They're Brilliant Economists -- But How Much Do They Know About Business?
Good to see Greg Mankiw publicly expressing his opposition to the so-called "Employers Free Choice Act." In a recent blog post, the former Council of Economic Advisers' chairman raised two key flaws in the "card check" legislation: First, the act strengthens unions, which are essentially cartels that exert monopoly power. Second, the legislation would remove the ability of workers to rely on a secret ballot in determining whether to organize, which (duh!) opens the door to intimidation by union organizers.
What's stunning, as Mankiw points out, is the number of economists who recently signed onto a statement supporting the need for this legislation. We're talking some of America's best-known economists here, from Robert Solow and Lester Thurow of MIT to Joseph Stiglitz of Columbia and Alan Blinder of Princeton. Their claim: the bill would "restore some balance to our labor markets" -- in other words, it would shift wealth from business owners to workers.
Now, these economists have forgotten more about economic theory in the past day than I'll ever know. But at the same time, I work closely with small manufacturers who seem to know a lot about what helps their profitability and what hurts it. These innovative, courageous business leaders have served as the backbone for our economy over the past decade. And so far I haven't found a single one who isn't scared out of his wits about this legislation. They see such a policy as undermining the relations they've built with their employees, as well a potential bank-buster in these very difficult economic times.
When card check comes up for a vote, while I recognize the temptation to listen to brilliant economists, I hope Congress will pay more attention to the men and women who own and operate our nation's small businesses. They think it's a terrible bill.
03-03-2009 8:01 AM